Carrot Rewards, an app designed to motivate people toward healthier living, has announced it is closing with immediate effect – just weeks after launching in the Northwest Territories.
The NWT government had a $140,000 contract with app developer Carrot Insights, a spokesperson confirmed on Wednesday.
That contract was set to run from February this year until the end of January 2020. The app provided residents with the ability to earn points for reward programs in return for measuring their daily steps and answering quizzes related to health and wellness.
The territorial government said it "continues to be in contact with Carrot Rewards to determine our next course of action."
The NWT announced its partnership with the app during a ceremony at the legislature on May 29, following in the footsteps of Newfoundland and Labrador, BC, and a limited Ontario pilot.
However, on Wednesday, the app's official Twitter account stated: "It breaks our hearts to be saying farewell to you as we have closed down the Carrot Rewards app today. Thanks for letting us play a small part in your health and wellness journey."
Its owners say it ran out of money.
The app disappeared from app stores earlier in the week, and its full website was replaced with a 'goodbye' message on Wednesday afternoon.
"As part of our due diligence, research, and meetings with Carrot officials, we were not previously made aware of any potential issues or concerns with the company, financial or otherwise," Damien Healy – a Department of Health and Social Services spokesperson – told Cabin Radio.
Healy said the app had 584 active users in the NWT, with 79 percent of them using the step-counting feature to earn reward points.
The territory and the app were jointly running a promotion to award a free Canadian North short-haul flight to a randomly drawn app user.
"Despite the bankruptcy protection notice, the Government of the Northwest Territories and its partner Canadian North will work with Carrot Rewards to ensure the company still awards a user the short-haul flight on Canadian North as originally promised," said Healy.
Funds ran out
In May, the territory said Carrot Rewards was "one of the first" apps to receive the NWT government's official endorsement.
By measuring their daily steps and completing basic quizzes, people who downloaded the app were able to earn points for redemption with popular loyalty programs – including Canadian North's Aurora Rewards.
At the time of the launch, the territory called the app "exciting, new, and innovative."
Carrot Rewards, available since 2016, reported passing one million users in November last year.
On its website, the app's owners wrote: "Just like so many other young start-up ventures, our beautiful carrot needed investment to keep running – and, even though we gave it our all, our funds eventually ran out and we could no longer be in business."
The Globe and Mail reported the app had received "at least $7.5 million in funding from the federal and BC governments" since its launch.
Speaking to the newspaper on Monday, Carrot Insights chief executive Andreas Souvaliotis said the company was filing for bankruptcy to pay off the reward programs to which it owes money for points earned by the app's users.
Souvaliotis told the Globe and Mail the lack of interest from many provinces and territories meant the app "was not performing the way we all thought it would perform."